Is the Natwest Invest Personal Portfolio Fund 5 (PPF5) permissible to partake in?


In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

In order to analyse the Shari’ah compliance of the investments in this scheme, each investment must be financially screened individually.

In such conventional schemes, generally, there is a high likelihood of investments of an impermissible nature. This is evident from the use of bonds and financial derivatives (amongst other possible unlawful elements), which are not Shari’ah compliant. [1] [2] [3]

In addition, since the Investment Manager is in total control of the investments, it is not possible for the scheme holder to opt-out of (or change) any investment choices.

Thus, one should adopt caution from participating in such schemes.

Note: Initially, it may seem like this particular scheme does not involve bonds, but based on our research and discussions with the bank itself and other senior scholars in the field of Islamic Finance, this is not likely to be the case. Moreover, even if this is the case, there are various additional nuances to consider, as outlined above, thus, the advice to avoid and adopt caution stands regardless.

And Allah Ta’āla Knows Best.
Mufti Mubasshir Ahmed
20 Muharram 1443 / 28 August 2021

Concurred by: Abdullah Desai | Annas Shah
Approved by: Mufti Tahir Wadee| Mufti Yusuf Ilolvi

Note: This fatwa is only to be viewed with the question asked. In the event of presenting this to a third party, please ensure it is coupled with the original question, as well as the references below for Islamic Scholars.

DISCLAIMER: The views and opinions expressed in this answer belong only to: the author, any concurring Ulama’ and the senior approving Muftis – they do not in any way represent or reflect the views of any institutions to which he may be affiliated.

Arguments and ideas propounded in this answer are based on the juristic interpretations and reasoning of the author. Given that contemporary issues and their interpretations are subjective in nature, another Mufti may reach different conclusions to the one expressed by the author. Whilst every effort has been taken to ensure total accuracy and soundness from a Shari’ah perspective, the author is open to any correction or juristic guidance. In the event of any juristic shortcomings, the author will retract any or all of the conclusions expressed within this answer.

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All of the details of this scheme have been derived from the official scheme information.
Refer to:
(Personal Portfolio Fund 5)

“Bond, in finance, a loan contract issued by local, state, or national governments and by private corporations specifying an obligation to return borrowed funds. The borrower promises to pay interest on the debt when due (usually semi-annually) at a stipulated percentage of the face value of the bond.”
[Encyclopedia Britannica –]

ولا شك أن هذه معاملات ربوية محرمة شرعا، والجواب أن شراء السندات ذات الكوبون الصفري التي تصدر بالحسم لا يجوز، ولو بقيمته الاسمية
[Fiqh al-Buyoo’, 1/342, Dar al-Qalam]

كل قرض يشترط فيه منفعة فهو حرام هذا إذا كانت المنفعة مشروطة في العقد فإن لم تكن مشروطة فدفع أجود فلا بأس
[Durar al-Hukkām, 3/94, Dar Ihya’ al-Kutub]

اس تعریف سے معلوم ہوئی کے بونڈ لینا ایک سودی معاملہ ہے جو موبقات میں سے شمار ہوتا ہے
[Fatāwa Darululoom Zakariyya, 5/361, Zamzam]

قال: “وكل دين حال إذا أجله صاحبه صار مؤجلا”؛ لما ذكرنا “إلا القرض” فإن تأجيله لا يصح؛ لأنه إعارة وصلة في الابتداء حتى يصح بلفظة الإعارة، ولا يملكه من لا يملك التبرع كالوصي والصبي ومعاوضة في الانتهاء، فعلى اعتبار الابتداء لا يلزم التأجيل فيه كما في الإعارة، إذ لا جبر في التبرع، وعلى اعتبار الانتهاء لا يصح؛ لأنه يصير بيع الدراهم بالدراهم نسيئة وهو ربا
[Al-Hidāyah, 3/60, Dar al-Fikr]

ومثل هذه الاختيارات شائعة اليوم…وإن هذه البيوع باطلة في الشريعة الإسلامية، لأن البائع لا ينقل إلى المشتري مالا، ولا حقا ماليا، فهو من قبيل أكل أموال الناس بالباطل
[Fiqh al-Buyoo’, 1/277, Dar al-Qalam]